ECON 2000 Final: test 3
Document Summary
Economic profit = total revenue explicit costs implicit costs. Accounting profit = total revenue explicit costs only (dollar) Economic profit = accounting profit implicit costs: normal profit (acct profit = implicit cost) Market structure - the number and relative size of firms in an industry. Monopoly (1 firm/seller /unique product to whole market / huge entry barrier) Perfect comp. (selling exactly same product/ huge no. The firm is a price taker. it will charge only the market price. The only decision left is how much to produce. Production decision (quanto voce vai ganahr se produzir mais uma unidade de output. As output increases, mc increases squeezing the profit from added units. If p>mc, we add to profit by selling that one. If p mc = increase production to increase profit.